Question: Assume there are two types of communities in the US, those in which there is a high benefit of pollution control and a high cost of pollustion control, and those in which there is a low benefit of pollution control and a low cost of pollustion control.
- Assume that the government must set either uniform regulations(a uniform level of pollution control) or a uniform fine for pollution.
- Show diagrammatically that a regulatory scheme may be preferable to a system of fines.
- How does your answer change if communities in which there is a high marginal cost of pollution contro happen to be communities in which there is a low marginal benefit.